First inter-Korean talks in a year delayed over disagreement

The first formal talks in a year between North and South Korean officials have been delayed after a failure to agree on a location or agenda in the wake of rising tensions following Pyongyang's controversial missile launch.

AFP - North and South Korea's first talks for more than a year were delayed Tuesday as the two sides could not even agree which building to meet in, dimming hopes of easing the high tensions between them.

The South's team crossed the heavily fortified border at around 8:35am for the scheduled talks at the nearby Kaesong joint industrial complex.

But as of 2:00 pm (0500 GMT) initial contacts had failed to produce agreement on which building to use for the talks or what to discuss, according to sources quoted by Yonhap news agency.

"Both sides exchanged opinions during the morning about how to arrange this contact, and liaison officers will meet again in the afternoon," said Kim Ho-Nyoun, spokesman for Seoul's unification ministry which handles cross-border relations.

Analysts had predicted little or no agreement.

The meeting at Kaesong, the last major co-operation project between the two sides, comes amid icy cross-border relations and threats from Pyongyang's military.

"The Lee group of traitors should never forget that Seoul is just 50 kilometres (30 miles) away" from the border, the North's military spokesman said Saturday, suggesting the city is vulnerable to attack.

The North is furious with South Korean President Lee Myung-Bak, who has abandoned a policy of providing almost unconditional aid to the communist state.

Regional tensions are also rising after the North's purported satellite launch on April 5, widely seen overseas as a disguised missile test.

The North, angry at UN censure of the launch, has announced it is quitting nuclear disarmament talks and restarting its atomic weapons programme. It has expelled US and UN nuclear inspectors.

Following the launch South Korea announced it would push ahead with plans to join a US-led initiative against shipments of weapons of mass destruction.

The North says any move by its neighbour to join the Proliferation Security Initiative (PSI) would be seen as a declaration of war.

In another complication, the North has been holding a South Korean worker at Kaesong for more than three weeks. It accuses him of criticising its communist regime and trying to persuade a local woman worker to defect.

Analysts believe the North will try to force the South to choose between PSI and the future of Kaesong, using the detainee as a bargaining chip.

Cho Bong-Hyun, an analyst with South Korean bank IBK, said the North will likely charge the detainee to raise tension and may even demand that all South Korean workers quit the joint venture.

"Chances are they will be saying, 'These are the results of our investigation and the crime is so grave he has to be tried here,'" Cho told Yonhap, citing sources involved in Kaesong.

"There could be a further warning, such as ordering all South Korean workers to leave the complex unless Seoul makes a big compromise."

The unification ministry said Seoul would respond "strongly" to any attempt to charge the detainee with a crime.

Spokeswoman Lee Jong-Joo said the previously agreed procedure is for South Korean employees at Kaesong to be warned, fined or expelled for any infraction.

She stressed that PSI and the investigation into the detainee are separate issues. "These two issues cannot be and must not be linked."

Opened in 2005, Kaesong is both a symbol of reconciliation and an attempt to combine the North's cheap but skilled labour with the South's capital and know-how.

Some 38,300 North Koreans work at 101 South Korean firms, producing items such as garments, kitchenware and watches.

But operations have often been hit by political tensions. In December the North restricted border crossings and expelled hundreds of South Korean managers from the estate.